Predicting

Predicting that Texas will have the most competitive and themost successful retail electric market in the country, Texas PublicUtilities Commissioner Brett A. Perlman said yesterday that thestate is on track to meet its deregulation date of Jan. 1, 2002.

Growth lies ahead for the North American gas industry as do anumber of risks and challenges, according to the just released”North American Natural Gas Trends 2000,” a joint report of ArthurAndersen and Cambridge Energy Research Associates (CERA).

Growth lies ahead for the North American gas industry as do anumber of risks and challenges, according to the just released”North American Natural Gas Trends 2000,” a joint report of ArthurAndersen and Cambridge Energy Research Associates (CERA).

It didn’t take long for those predicting that May swing priceswould remain under index levels all month to have to eat theirwords. Not all points matched indexes again Tuesday, but quite afew did in a general show of strength by the cash market, and therest were coming close. Most gains were in the vicinity of a dime,but those in the Rockies and California markets tended to be closerto a nickel or so.

Anadarko CEO Robert J. Allison Jr. is not alone in predicting asustained oil market recovery now that OPEC has decided it can livewith a little less supply on the market. But unlike most of theother optimistic soothsayers attending the Howard Weil EnergyConference in New Orleans last week, Allison sees a majorturnaround ahead and much greater volatility than has been presentin market cycles of the past.

Anadarko CEO Robert J. Allison Jr. is not alone in predicting asustained oil market recovery now that OPEC has decided it can livewith a little less supply on the market. But unlike most of thesoothsayers attending the Howard Weil Energy Conference in NewOrleans, Allison sees a major turnaround ahead and much greatervolatility than has been present in market cycles of the past.

Anadarko Petroleum said its annual energy production is expectedto grow at an average rate of 18% per year, from 48 million energyequivalent barrels (EEBs) in 1998 to an estimated 92 million EEBsin 2002. The company said the new production forecast is based ondevelopment of known fields and does not include any newexploration discoveries.

Southern Company CEO A.W. “Bill” Dahlberg is something more thanshy about predicting where gas prices will go. But the industry’sembrace of gas-fired generation does prompt a modestly optimisticresponse to the question. “It would be logical to say that ifthere’s that much new demand for gas, the likelihood is that itwill drift up. And I guess if I were making the bet, that’sprobably the bet that I would make,” Dahlberg told reporters duringa briefing at the 17th Congress of the World Energy CouncilWednesday in Houston.

While the abundance of gas now in storage has analystspredicting soft prices in the coming months, others suggest thecharacter of storage operations will be changing as more and moremarketers take title to storage capacity from LDCs. Storage held bylocal distribution companies and power generators typically hasbeen used to ensure supply. Marketers holding storage or optimizingstorage assets under contract with LDCs see storage as a financialopportunity in addition to a supply insurance policy. Thearbitrageurs will handle their storage differently when suppliesget tight, said Pete Kinsella, Columbia Gas Transmission vicepresident of marketing and volume management.